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School District Budget In Rough Water

State riffs allocation funds

By SVERRE BAKKE

The Enterprise

It's only July, but the White Salmon Valley School District's administration is already looking ahead to the local board of education's December meeting and a February 2008 maintenance and operations levy election.

Superintendent Dale Palmer is doing so with a sense of urgency after getting "devastating budgetary news" late last spring that the school district will lose some $140,000 in state levy equalization funding -- known in statute as state matching funds for "local effort assistance" -- over the next two school years.

"When we plug all the numbers into the formula the state uses for calculating levy equalization distributions, we're only going to get roughly $82,837 for 2007-08 and 2008-09," Palmer noted, compared to the $222,529 the district received for 2006-07.

"If there's any good news here," he added, "it's that we won't lose it all in one school year."

Local effort assistance became available in 2000. The law states: "The purpose of these funds is to mitigate the effect that above average property tax rates might have on the ability of a school district to raise local revenues to supplement the state's basic program of education. These funds serve to equalize the property tax rates that individual taxpayers would pay for such levies and to provide tax relief to taxpayers in high tax rate school districts."

"It's a complicated business, which is why it's taken us a while to get a handle on the situation," Palmer said. "But the bottom line is, we aren't going to receive revenue we've anticipated receiving."

According to district business manager Terry Anderson, the district will lose about $96,000 next school year and the remaining $44,000 the following school year.

"What the state treasurer's office is saying is that this is no longer a property poor district and that, in effect, because its tax base is larger, it can afford to raise more in local taxes to pay its operating costs," Anderson explained.

After years of qualifying for the state matching funds, steady growth in western Klickitat County and eastern Skamania County has pushed the local school district from the "have not" category into the "have" category.

Property within the school district's boundaries is currently valued by the assessor's offices of Klickitat and Skamania counties at about $800 million -- a figure the state revenue department maintains is only 71 percent of the district's true assessed valuation.

The latest assessment represents an increase of $109 million in valuation but a 15 percent decline in true value. As a result, the Office of the State Treasurer is no longer treating the local school district as "property poor."

And, as a consequence, the district will not be eligible for state levy equalization funding after December 2008.

For the coming school year, the district has no other way of making up the $96,000 decrease in equalization funding other than reducing expenditures in programs and personnel. Planning on that front is already underway, Palmer said.

As for the 2008-09 school year, he continued, the administration is putting together a report for the school board that outlines its options for the next maintenance and operations (M&O) levy. From that report will come an M&O levy proposal, which the board must approve before Dec. 28 in order to get it on the February 2008 ballot.

"We need to make up that loss in (levy equalization) revenue and the only way to do that is to ask voters for more money through the levy," Palmer said, "and do it in a way that doesn't increase the cost per $1,000 of assessed valuation."

White Salmon Valley School District's current two-year M&O levy of $1.675 million per year (and about $2.50 per $1,000 of assessed valuation) expires in December 2008.

Palmer said every school district in the state has a levy base, also called a "levy lid," which is a percentage of all revenues it expects to receive in a fiscal year.

"By law, we can ask for a maximum of 24 percent of that levy base on the M&O levy," he said. "On our last levy, we asked for 18 percent of that base. If we want the whole 24 percent, we would be seeking something in the neighborhood of $2.1 million."

He added: "All we know right now is that we have to make up this money and we're going to have to do it by increasing the levy. But by what amount we don't know yet. That's a decision the school board is going to have to make in the coming months."

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